As at September 5, 2018. A c.0.17% decrease from $45.55bn on Sept.
4, 2018

Brent Crude

$76.15pb

As at September 7, 2018. A c.0.10% decrease from $76.23pb on Sept. 6, 2018

Bonds

The Bond
market remained largely order driven, with selloffs witnessed mostly on the
shorter end of the curve, in reaction to the hike in longest tenor OMO stop
rate to c.13.30% eff. yield by the CBN in the previous session. Yields
consequently rose higher by c.15bps across the curve, with the most selloff
seen on the Jul 2021 and Jan 2022 maturities.

In
the coming week, we expect yields to maintain an upward trend, as market
players maintain a relatively risk off stance in tune with recent developments
in short term interest rates.

Secondary Market Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

15.54 13-Feb-20

14.47

13.92

0.21

14.50 15-Jul-21

15.30

14.96

0.30

16.39 27-Jan-22

15.01

14.82

0.39

14.20 14-Mar-24

15.29

14.95

0.22

12.50 22-Jan-26

15.30

15.22

0.07

16.29 17-Mar-27

15.25

15.10

0.03

13.98 23-Feb-28

15.23

15.12

0.06

12.15 18-Jul-34

15.49

15.28

0.13

12.40 18-Mar-36

15.40

15.28

0.05

16.2499 18-Apr-37

15.42

15.22

0.06

Source: Zedcrest Dealing
Desk

Treasury
Bills

In tune with the recent hike in
stop rates at the last OMO auction by the CBN, the T-bills market traded on a
significantly bearish note, with yields rising by c.80bps on average across the
curve. We witnessed the most selloffs on the shorter dated maturities (sept –
Dec), while market players were relatively more moderate in their selloff on
the mid to long end of the curve.

In the coming week, we expect
market players to remain cautious, despite the significantly buoyant level of
system liquidity at c.N540bn positive. Barring continued offshore selloff, we
expect some retracement, especially on the shorter dated maturities.

Secondary
Market Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

4-Oct-18

12.50

11.25

1.40

1-Nov-18

12.15

11.90

0.90

6-Dec-18

12.50

12.10

0.95

3-Jan-19

12.50

12.35

0.70

14-Feb-19

12.65

12.50

0.40

14-Mar-19

12.60

12.45

0.50

4-Apr-19

12.60

12.40

0.35

18-Jul-19

12.55

12.10

0.20

Source:
Zedcrest Dealing Desk

Money
Market

Following a
net OMO repayment of c.N100bn in the previous session, the OBB and OVN rates
declined further to 2.83% and 3.42% respectively, as the market remained awash
with liquidity at c.N540bn positive.

We
expect rates to remain moderated in the coming week, barring a significant
increase in the spate of OMO interventions by the CBN. We however expect rates
to close higher w/w as the CBN is expected to conduct its bi-weekly Retail FX
auction on Friday.

Money Market Rates

Current (%)

Previous (%)

Open Buy Back (OBB)

2.83

3.00

Overnight (O/N)

3.42

3.83

Source: FMDQ, Zedcrest
Research

FX Market

The Naira/USD rate remained
stable at the interbank, closing at N306.20/$. At the I&E FX window, a
total of $249.84mn was traded in 293deals, with rates ranging between N350.00/$ -
N364.50/$. The NAFEX closing rate depreciated marginally by c.0.01% to N362.78/$
from N362.73/$ previously.

At the parallel market, the cash
and transfer rates appreciated by 10k and 50k to close at N359.40/$ and N361.50/$
respectively.

FX Market

Current (N/$)

Previous ( N/$)

CBN Spot

306.20

306.20

CBN SMIS

358.87

358.87

I&E FX Window

362.78

362.73

Cash Market

359.40

359.50

Transfer Market

361.50

362.00

Source: CBN, FMDQ, REXEL
BDC

Eurobonds

The NGERIA Sovereigns maintained its
bullish recovery in today’s session, with yields compressing further by c.12bps
across the curve. This came on the back of a slowdown in the intense EM
selloffs witnessed earlier in the week.
We witnessed the most gains today on the Feb 2032s, which gained about
1.15pct on the day. Yields however closed weaker by c.5bps w/w.

The NGERIA Corps were conversely bearish,
with the most selloff witnessed on the DIAMBK 19s and FIDBAN 22s, consequently
reversing some of the earlier gains on the tickers.